John Reed Stark, former head of the US Securities and Exchange Commission’s (SEC) Internet Enforcement Agency, said that Binance’s financial situation is even more ‘uncertain’ than that of FTX. Meanwhile, Boris Johnson’s younger brother backed out as scrutiny on the Bitcoin exchange grew
“The financial situation of the Bitcoin exchange is more uncertain than FTX”
John Reed Stark, former head of the US Securities and Exchange Commission’s Internet Enforcement Agency, suggested that Binance’s financial situation is even more uncertain than that of FTX, Reuters reported. He also stated that there is no transparency coming from the Bitcoin exchange.
According to Reuters’ analysis of the crypto giant’s corporate filings, little is known about Binance. The Bitcoin exchange does not disclose information such as cash reserves, profits, and income. It is also unknown where the exchange that processes an estimated $22 trillion worth of crypto this year is actually based. Binance does not disclose information about its native token’s role in the balance sheet or its exposure to risk when allowing customers to margin trade with borrowed funds.
A review of filings from Binance’s subsidiaries in countries around the world shows that few details were given about the overall business structure, operation, and how Binance.com moves funds between itself and its many subsidiaries. Evidence suggests that these private entities only serve as ‘window decorations’ for Binance, which has limited or no activity on its own.
As you follow on Kriptokoin.com, Mazars has published a report on Binance’s proof of reserve. However, after the backlash, Mazars announced that it will suspend working with crypto companies going forward. The decision affected the price of Bitcoin and other cryptocurrencies due to the uncertainty surrounding Binance’s financial health. Meanwhile, reports are circulating that some US federal prosecutors have gathered enough evidence to file criminal charges against Binance CEO Changpeng Zhao alleging money laundering.
Jo Johnson resigns from Binance advisory role
Boris Johnson’s younger brother Jo has resigned from his role as an advisor to Binance. Lord Johnson of Marylebone has taken a role on Bfinity’s UK advisory board, The Telegraph reports. Binanc founded this payment company in September. Johnson was also on the board of directors. Lord Vaizey, the former Conservative culture minister, who is a member of Binance’s global advisory board, also sits on this board.
The former Tory lawmaker and universities minister has resigned as scrutiny over Binance’s finances grows. Founder Changpeng Zhao insisted last week that “business is as usual” despite investors pulling in $6 billion in funding. Later it turned out that the auditor Mazars stopped working with him.
Johnson’s resignation comes amid the crisis in the cryptocurrency industry, following the collapse of one of Binance’s rivals, FTX, last month, and the arrest of FTX founder Sam Bankman-Fried, accused in the US of fraud, money laundering and conspiracy allegations. Johnson and Vaizey’s relationship with Binance underlines the company’s efforts to gain attention from UK politicians and regulators.
Last year, the Financial Conduct Authority blocked the company from establishing a division in the UK due to concerns about its transparency. Earlier this month, Johnson became president of digital education platform FutureLearn. Dutch Global University Systems had bought FutureLearn. Johnson said:
I took on a new role as president of the digital learning platform FutureLearn. I’m downscaling other activities to focus on this.